Forex Investment and Currency Trading

USD/CAD – Failure to pierce resistance at 1.0343 keeps the neutral 0.9724-1.0343 trading range intact. USD/CAD entered a retracement phase after overbought valuation metrics caused prices to fail to pierce resistance at 1.0343 last week.The retracement is amplified by a false break above resistance at1.0260 last Friday. A close below nearby support at 1.0112 would favour a deeper selloff toward 0.9991 and 0.9852. These two levels are expected to attract buying interest for a return to 1.0343. Target is located at 1.0335 in this regard.

EUR/USD – Close below 1.5344 would increase the probability of a topping pattern forming. EUR/USD reached price target at 1.5400 last week as prices re-tested a key support level at 1.5344. While a daily close above initial resistance at 1.5575 would project additional short-term gains for the EUR, triangle resistance at 1.5798 is expected to attract selling pressure for another test of 1.5344. A close below this level would increase the chances that a topping pattern is in place, highlighting 1.5150 and 1.4968 thereafter. 1.5400 is the target and would shift to a more bearish bias on a close below 1.5344.

GBP/USD – Close above 1.9678 today would favour additional short-term gains to 1.9803. GBP/USD failed to reach target at 1.9350 last week after support at 1.9466 effectively contained the recent selloff. While a daily close above initial resistance at 1.9678 would favour additional gains toward the 7-month resistance trend line at 1.9803, this level and 2.0002 will attract selling interest for a return to 1.9466. A close below this level would affirm the bearish view and target 1.9339 thereafter.

USD/JPY – Overbought valuations set the stage for a retracement to 105.61. USD/JPY reached price target at 108.00 after generating a bullish trend change above a 1-year resistance trend line at 106.20. Resistance at 108.58 has contained the advance so far as the daily studies move to an overbought extreme. This presents the scope for a retracement, with pullbacks to support at 105.61 and 103.90 expected to attract buying interest for another test of 108.58. A close above this level would re-affirm bullish view and target 110.10.

USD/CHF – Close above 1.0515 would favour additional gains to 1.0729. USD/CHF is grinding higher after forming a hammer pattern in March. With prices tracing out a symmetrical triangle pattern, a daily close above resistance at1.0515 is required in order to support bullish view and sustain the medium-term uptrend. This outcome would then target 1.0729, followed by 1.0960. Support at 1.0219 and 1.0152 is expected to attract buying interest in the context of the uptrend, with 1.0530 remaining as the price target this week.

AUD/USD – Short-term retracement highlights resistance levels at 0.9530 and 0.9652. AUD/USD failed to reach target at 0.9200 after the daily studies reached oversold levels last week. With a buy signal now in place, initial resistance at 0.9530 is in focus, followed by 0.9652. These two levels are believed to attract renewed selling pressure for a test of key support at 0.9314. A close below this level would affirm the bearish view, highlighting 0.9208 and 0.9033.

NZD/USD – Poised for a retracement toward 0.7823 before the downtrend resumes in earnest. NZD/USD reached price target at 0.7450 last week – just as a hammer pattern formed to turn prices higher. With the daily studies also unwinding oversold conditions, a retracement to resistancel evels at 0.7703 and 0.7823 is probable. However, the downtrend this is in place suggests that these two levels will attract renewed selling pressure for a test of support at 0.7450, followed by 0.7369.

USD/MXN – Resistance at 10.4340 is expected to attract selling interest for a move toward 10.1480. The recent price correction in USD/MXN stalled against resistance at 10.4340 as expected. More importantly, the correction has allowed the daily studies to resolve an oversold divergence. The downtrend in effect indicates that resistance at 10.4340 and the channel top at 10.5210 should attract selling interest for a test of initial support at 10.2860. A close below this level would target the channel base at 10.1480.